Bankwest cuts three-year fixed mortgage rate to lowest on market as new customers become harder to find

AAP

Thursday, 16 May 2019 12:54PM

RBA rate reduction

The West Australian

VideoThe Reserve Bank of Australia could reduce interest rates today possibly to a new record low level.

Commonwealth Bank-owned Bankwest is slashing its three-year owner-occupier mortgage rate as lenders chase an ever decreasing number of suitable home loan customers.

The Perth-based lender will cut its principal and interest rate for owner-occupiers by half a percentage point to 3.48 per cent from Friday, which product comparison service Canstar said is the lowest in the market.

Its three-year fixed investor rate will come down to 3.88 per cent.

“The move puts Bankwest well in the mix for market share of the diminished pool of borrowers in market who tick all the credit boxes,” said Steve Mickenbecker, Canstar group executive for financial services.

“All of the big banks have been cutting fixed rates in recent weeks and the trend is being picked up by the rest of the market.”

While the Reserve Bank has been resisting pressure to cut the cash rate — which is a factor in banks’ funding costs — lenders have been trimming mortgage rates to try to stimulate demand amid a foundering real estate market.

NAB-owned UBank is cutting its three-year fixed owner-occupier rate to 3.59 per cent from 3.74 per cent, while ME this week trimmed its equivalent rate from to 3.73 per cent from 3.94.

The pressure on the RBA to cut the cash rate — a move that could lead to more lenders reducing the cost of borrowing — increased on Thursday when official data showed Australia’s unemployment rate rose 0.1 percentage points in April to a worse-than-expected 5.2 per cent.